Budget airlines in second coming, air war looms again

With passenger traffic set to grow 19 per cent per year, domestic carriers are fighting for a pie in the sky While dominant ones such as Kingfisher Airlines, Jet Airways and Air India are trying to retain market shares despite mounting debts, low-cost airlines such as IndiGo, SpiceJet and Go Air are making an aggressive bid to grow market share by acquiring more aircraft.

IndiGo, which last week inducted the 25th aircraft into its fleet, will add 15 more A320s by 2011-end. The company is aiming for a lions share of the domestic market. “This year we will add nine more aircraft and in 2011 we will induct six more as per schedule. We don’t have any funding problems,” said Aditya Ghosh, president, IndiGo.

According to experts, IndiGo’s market share of 15.3 per cent in January this year against SpiceJet’s 12.2 per cent could make it a formidable force.

The Delhi-based airline had placed an order for 100 aircraft in 2005 and would them by 2016.

Not to be left behind, SpiceJet is gearing up to induct nine more aircraft. This will take its fleet size to 28.

The airline’s Chief Executive Officer Sanjay Aggrawal recently told Hindustan Times that the airline was doing innovative things by offering value-for- money deals to stay ahead in the race and remain profitable. SpiceJet, experts said, could also acquire an airline to ramp up capacity and market share.

“SpiceJet will be a key player (in consolidation). Jet Airways will be open to opportunities, allowing it to once again dominate the domestic market,” Centre for Asia Pacific Aviation (CAPA) said in a recent report.

The domestic market may become almost entirely low-cost, with Jet Airways and Kingfisher Airlines’ transition to mostly all-economy models. Jet and Kingfisher could end being the largest low-cost carriers in the market, CAPA said. “I believe airlines will not go for profitless growth,” said Kapil Kaul, CEO, South Asia, CAPA.

While Air India is inducting more aircraft, Jet has started flying to small cities. The sector seems to be gaining momentum once again.